In 2009, and by virtue of our turbulent global economy, the universal watchwords in our industry will be “cost savings.” From an information technology perspective, this will drive initiatives to optimize and rationalize disparate applications, infrastructure and facilities as a means to contribute to needed cost savings. It also will fuel continued migration of IT services to lower-cost parts of the world. The same will be true of “standard” business processes for human resources management, finance and accounting, procurement, and other back-office functions. There is not much new here, except for the urgency companies will place on exploiting the cost-savings and optimization opportunities inherent in these now-common initiatives.
What is new is the creativity that companies will exercise to finance these transformation activities. Credit will continue to tighten, and weaker freight rates and volumes will continue to put pressure on profits and cash.
Hence, we will see emphasis placed on low-hanging, cost-saving projects such as infrastructure consolidation and asset sale/lease-back to create a “bank” to fund further transformation projects. This self-funding approach, enhanced by project financing to further accelerate the realization of cost savings, will allow IT organizations to contribute to their company’s short-term cash needs, as well as position themselves well for the economic recovery.
The winners will emerge with a lower-cost base for IT and back-office services, as well as improved and standardized business processes, improved return on assets, improved cash flow and lower selling, general and administration costs.